Jefferies analyst Youssef Squali cut his price target on Yahoo Inc.'s shares Tuesday morning, due to slower growth in overall online ad spending.

Squali set a $20 price target, down from $23. That's still far above the stock's pre-market trading price of $10.89, up 15 cents. Squali kept his "Buy" rating.

Squali trimmed his earnings estimate for the 2009 fiscal year to 46 cents per share from 55 cents per share, and the revenue estimate to $5.5 billion from $5.7 billion, implying a 2 percent decline from the previous year.

The analyst sees a deterioration in both in search-related advertising and in "display" ads not tied to searches.

But he also noted that with Chief Executive Jerry Yang departing and activist investor Carl Icahn on the board, Microsoft Corp. will have a more receptive partner if it decides to revive its bid to buy Yahoo.